Understand how exchange rates can affect small businesses (B)
Starter ( 15 mins)
Find out the UK cost of
Ipad mini 16gb wifi AND Ipad air 128gb wifi with cellular
Now find out the US cost for THE SAME 2 PRODUCTS
Look up todays dollar to pound exchange rate and convert the US prices to UK prices - are they the same as the original UK prices?
Keywords (5 mins)
Information (10 mins)
Exchange rates are the rates at which one currency is changed into another. They affect all businesses as it is impossible to operate without relying on at least commodities being "bought" from outside your own currency. Oil prices are charged in dollars and no business operates without using oil in some way.
If the pound goes UP
Firms EXPORTING sell less as they are more expensive
Firms COMPETING against imported goods loose sales as they are less competitive
Firms IMPORTING materials will see costs fall and profits rise
If the pound goes DOWN
Firms EXPORTING goods sell more as their goods are cheaper
Firms COMPETING against imported goods gain sales as the imported goods cost more
Firms IMPORTING goods will see their costs rise and profits fall
Activity (10 mins)
Make a list of 5 items you purchase that are made outside the UK........
What will happen to the prices of these goods if there is a SUSTAINED fall in the pound...
Task (15 mins)
Find out the UK's top 5 imports and exports
What does this tell you about the BALANCE of trade in the UK - will a strong or weak pound have a major impact?
Plenary (5 mins)
Discuss with a friend WHY do you think there is a such a huge price gap in the iPads, what else could account for that other than interest rates?
The Economic Context
Lesson 1 Lesson 2 Lesson 3 Lesson 4 Lesson 5 End of Unit Test
Lesson Objectives
Starter ( 15 mins)
Find out the UK cost of
Ipad mini 16gb wifi AND Ipad air 128gb wifi with cellular
Now find out the US cost for THE SAME 2 PRODUCTS
Look up todays dollar to pound exchange rate and convert the US prices to UK prices - are they the same as the original UK prices?
Keywords (5 mins)
Information (10 mins)
Exchange rates are the rates at which one currency is changed into another. They affect all businesses as it is impossible to operate without relying on at least commodities being "bought" from outside your own currency. Oil prices are charged in dollars and no business operates without using oil in some way.
If the pound goes UP
If the pound goes DOWN
Activity (10 mins)
Make a list of 5 items you purchase that are made outside the UK........
What will happen to the prices of these goods if there is a SUSTAINED fall in the pound...
Task (15 mins)
Find out the UK's top 5 imports and exportsWhat does this tell you about the BALANCE of trade in the UK - will a strong or weak pound have a major impact?
Plenary (5 mins)
Discuss with a friend WHY do you think there is a such a huge price gap in the iPads, what else could account for that other than interest rates?